Blitz Bureau
THE Supreme Court has ruled in favour of the Centre in a case concerning the issuance of 90,000 reassessment notices under the old Income Tax regime.
These notices were issued after April 1, 2021, under the old reassessment scheme, and the ruling addressed the applicability of the newly amended reassessment provisions, as well as the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, or TOLA, which altered the procedure and timelines for issuing such notices.
The judgment, delivered by a Bench led by CJI DY Chandrachud, held that after April 1, 2021, the substituted provisions of the Income Tax Act would apply retrospectively, even for past assessment years. This means that the new reassessment regime must be read alongside TOLA, which temporarily extended time limits due to the Covid-19 pandemic.
The Bench, also comprising justices JB Pardiwala and Manoj Misra, further directed that any reassessment notice issued beyond the surviving time limits under the new regime would be invalid.
For taxpayers, this ruling clarifies that reassessment notices issued after April 1, 2021, will be governed by the amended provisions of the Income Tax Act, despite the Revenue’s reliance on the old reassessment regime due to TOLA’s provisions. Importantly, notices that do not meet the revised time limits will be set aside, giving taxpayers some relief from pending reassessment proceedings. The judgment primarily dealt with the transition from the old reassessment regime to the new provisions enacted in 2021, alongside the application of TOLA.
